The Sad Demise of Skill-Based Pay in the Virginia Department of Transportation

AuthorReginald A. Shareef
Published date01 September 2002
Date01 September 2002
Subject MatterArticles
The Sad Demise of Skill-Based
Pay in the Virginia Department
of Transportation
Radford University
The Virginia Department of Transportation attempted to use skill-based pay
(SBP) to trigger the development of both multiskilled, self-managing work teams
and a high-involvement work culture. A case study determined that this “new
pay” intervention did not achieve intended goals. Two related, internal dynam-
ics negatively affected the change effort: untimely systems redesign between SBP
and agency subsystems and nonexistent strategic visioning to articulate where
managers would “fit”in a high-involvement culture. These incongruencies led to
loss of political support in the Virginia legislature, which ended the Virginia
Department of Transportation SBP innovation. The study suggests that public
agencies using SBP as a catalyst for institutional transformation must (a) be pre-
pared for simultaneous systems redesign to support the SBP intervention, (b)
address the job security needs of managers, and (c) produce successful outcomes to
maintain political support throughout implementation and diffusion.
In a 1998 Review of Public Personnel Administration article, Shareef (1998)
assessed the impact of skill-based pay (SBP) on employee satisfaction and
organizational performance in the Virginia Department of Transportation
(VDOT). This evaluation was conducted at the midpoint of a 5-year pilot
program and was based on several determinants that the research literature
suggested were required for successful SBP implementation and diffusion.
The research concluded that although four of the determinants had been
achieved, the most important—“fit” or congruence of the “new pay” system
with other redesigned subsystems (e.g., information, training, appraisal, etc.)
that constitute a high-involvement work culture—had not occurred. Shareef’s
research suggested that unless alignment occurred between these crucial sub-
systems and SBP, the innovative pay plan was unlikely to be a catalyst for
Review of Public Personnel Administration,Vol. 22, No. 3 Fall 2002 233-240
© 2002 Sage Publications
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